"And you have to be a new borrower as of Oct. 1, 2007, and you must have received a direct loan on or after Oct. 1, 2011," Smith said.

Right now student loans must be paid back at the minimum of 15 percent. President Obama’s new plan allows loan forgiveness at 20 years of on-time payments instead of the 25 years under the old plan. Students who work in public service can count on loan forgiveness after 10 years.

Smith said the calculations are performed based on the payer’s discretionary income.

"Anything that’s left from the priorities that need to be paid. Housing, food, transportation, utilities. Those are the things that are priorities and then after that, it would be 10 percent of what’s left over," Smith said.

The plan was to become effective in 2014, but the government accelerated the program to get it up and running and it officially begins Dec. 21.